Acton Institute PowerBlog - Entries tagged as biofuels

The recent dramatic rise of food prices reflects the worst agricultural crisis of the last 30 years, especially for developing countries whose citizens inevitably spend a larger portion of their incomes for basic needs. The list of countries facing social unrest as a result is long and growing: Cameroon, Egypt, Niger, Somalia, Ethiopia, Mauritania, Bangladesh, Burkina Faso, Haiti, Indonesia, Mexico, Argentina, and the Philippines.

Consequences of these price increases are also affecting the United States, where rice is beginning to be rationed, Europe, where the price of bread in the last six months has grown 17%, and Japan, where butter has disappeared from markets and inflation is appearing for the first time in 10 years.

Many people in the developed world know that the price of oil has risen from $88 to over $114 a barrel in the last six months. But the price of corn, wheat, rice, milk and soybeans have increased even more so; corn and wheat have shot up 70% and rice is up 141% compared to January 2007.

This global crisis is affecting approximately a billion people around the world and the World Bank estimates that it could lead 100 million people into poverty, not to mention starvation.

The causes of this phenomenon are multiple and inter-related. Most economic analysts and agricultural experts have highlighted six main root causes to this emergency:

In the United States subsidies given to farmers that grow corn used for the production of biofuel (ethanol). A quarter of the national crop production is now devoted to the bio-fuel industry.
In Europe, the Common Agriculture Policy (CAP) which pays farmers to restrict their output and locks out agricultural products from outside the European Union.
In Australia, a terrible draught that has lasted 2 years and compromised 60% of the agricultural production.
Increasing demand for rice, wheat, meat in China and India
Decrease of cultivated land especially in China and India, where agricultural districts are transformed in industrial areas.
Increase in the price of fuel which has resulted in an increase in the price of fertilizers.

The market perversions caused by government subsidies for bio-fuel production and the export restrictions mandated by governments in the name of “food security” are particularly damaging and add to what we already know about the law of unintended consequences.

It is interesting and perhaps even surprising to note how the Catholic Church is reacting to this issue, given the Church’s significant role in many developing countries and its presence in many international and humanitarian activities.

Despite heavy lobbying from environmental activists, the Church has given priority to the needs of the human person and his integral development. In practice, this has meant Vatican criticism of bio-fuel subsidies and Vatican support for biotechnology that increases agricultural yields such as the use of genetically modified organisms.

For example, at a recent FAO conference in Brazil, the Holy See’s representative, Msgr. Renato Volante, said “bio-fuel is a serious threat to the natural right of every individual to proper nutrition, causing food riots and an increase in worldwide poverty.” The bishop of San Marino, Luigi Negri, hosted an April 22 event that highlighted the potential of GMOs and new seed specimens that are already being used by 12 million farmers worldwide.And Archbishop Silvano Tomasi the Holy See’s Permanent Observer to the United Nations in Geneva, has blamed poor distribution, rather than the lack of food, for the crisis.

Curiously enough, Catholic non-governmental organizations (NGOs) such as Caritas Internationalis, Sant’Egidio and FOCSIV seem to be behind the curve when compared to the Church hierarchy. The NGOs have generally clamored for more foreign aid but have not addressed core issues as bio-fuels and biotechnology.

Even secular NGOs such as Oxfam and CARE are beating them to the punch and have even called for the elimination of trade-distorting subsidies, export restrictions and price controls.

It is difficult to generalize about such as complex international problem and about a Church of 1 billion people. But it is a shame that Catholic NGOs need to catch up not only with their fellow Catholics as well as their fellow humanitarians.

“The challenge of climate change is at once individual, local, national and global. Accordingly, it urges a multilevel coordinated response, with mitigation and adaptation programs simultaneously individual, local, national and global in their vision and scope”, stated Archbishop Celestino Migliore, representative of the Holy See, at the 62nd session of the U.N. General Assembly, which took place earlier this month. The theme of the session was ”Addressing Climate Change: The United Nations and the World at Work."

Much attention is being given to climate change in the wake of EU President Jose Manuel Barroso’s new climate control plan. President Barroso’s proposal, released in January, intends to control greenhouse gas emissions through heavy legislation. The “20/20/20 by 2020” goals are ambitious; cut greenhouse gas emissions by 20%, produce 20% of its energy from renewable sources, and increase energy efficiency by 20% no later than the year 2020. The EU intends to lead the way in implementing greener energy systems, despite the heavy criticism it has drawn from some of its chief member states, namely France and Germany.

Big business is getting in on the renewable energy bandwagon. General Motors, for example, has announced plans to design at least half their vehicles to run on ethanol.

Meanwhile, in the media reports keep coming concerning the uncertainty that biofuel hype is going to have the desired long-term effect for global warming. Experts argue that the production of biofuels may give off cleaner emissions, but will require more energy to manufacture. Economists are eyeing rising food prices -especially corn- with worry. Demonstrations over the price of staple foods in Mexico and Indonesia last summer were attributed to the U.S. trial in promoting ethanol at the gas pump.

The Vatican repeatedly affirms that man is responsible for the environment. “Consumers must be aware that their consumption patterns have direct impact on the health of the environment,” Archbishop Migliore said at the U.N. "Thus through interdependence, solidarity and accountability, individuals and nations together will be more able to balance the needs of sustainable development with those of good stewardship at every level.”

Nevertheless, responsibility towards the environment does not usurp responsibility towards one’s fellow man, and this is implicit in Archbishop Migliore’s address. While President Barroso and the EU, worry themselves about what to do with climate change, poor countries may be watching their daily bread disappear into gas tanks and industrial energy due to ill-advised legislation and propaganda. Lack of regard for scientific input and global economic effects is contemptible, no matter how officials may applaud their green conscience.